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Will an Increase in Interest Rates Crush Home Prices?

December 4, 2014 10:21 am

Will an Increase in Interest Rates Crush Home Prices? | Keeping Current Matters There are some who are calling for a substantial drop in home prices should mortgage interest rates begin to rise rapidly. Intuitively that makes sense. The cost of a home is determined by the price of the home and the price of financing that home. If mortgage interest rates increase, less people will be able to buy. The logic says prices will fall if demand decreases.